newsworthy
Truckload rates
continue upward
march
FREIGHT RATES IN THE $350
billion to $500 billion-a-year
truckload market have started 2012 by heading in the same direction as they did for most of 2011: higher.
According to analysts at Portland, Ore.-based TransCore Freight
Solutions, spot market and contractual rates in mid-January for the three
main types of livery—dry van, refrigerated, and flatbed—were rising at
close to the same pace they were at the end of 2011. Last year, spot rates
rose 7. 4 percent over 2010 levels, while contract rates increased by 6. 5 percent, according to the consultancy, which tracks rates on 18,000 lanes in
135 U.S. markets and an additional 2,000 lanes in 14 markets in Canada.
TransCore analysts expect contract rates in 2012 to rise between 5 and 6
percent, and spot rates to increase by nearly the same level as in 2011. They
caution, however, that forecasting full-year data in mid-January is an
inherently risky exercise.
Most striking about the TransCore data is the unusually strong growth in
flatbed rates. As of Jan. 9, the spot market rate for flatbed equipment stood
at $1.68 per mile, a 9.1-percent increase from $1.54 a mile at the same time
in 2011. Flatbed rates historically gain strength in the spring and peak
around mid-year. Flatbed spot rates in 2011 peaked in June at $1.76 per mile.
What’s unusual here, according to TransCore analysts, is that flatbed rates
remained strong well into the fall of 2011 and showed strength again in
January, a seasonally soft month. TransCore analysts say reasonably mild
January weather in much of the nation could be contributing to the January
gains. However, given that flatbeds are mostly deployed to carry freight used
in housing and construction, the rate strength could be a sign of firming
demand in those economically battered sectors and a signal that housing will
contribute to, not detract from, overall economic growth in 2012.
Another factor driving up rates for all three equipment types is the continued scarcity of supply. TransCore analysts say shippers and brokers continue to have trouble finding consistent supply sources. Users are increasingly being forced to look to their fourth or fifth choice carriers because
they can’t obtain capacity at reasonable prices from their top three carriers.
They’re also being pushed into the spot market due to surges in demand
that their contract carriers cannot accommodate, the consultancy said.
CAPACITY CRUNCH CONTINUES
The tight capacity situation is unlikely to loosen up anytime soon.
Transport advisory firm Transport Capital Partners (TCP) said in mid-January that nearly three-quarters of carriers surveyed during the fourth
quarter of 2011 planned to add between zero and 5 percent p. 20
Nashville Wire buys
AWP Industries
Nashville Wire Products Mfg.
Co. announced in early January
that it has acquired most of the
assets of its leading rival,
Frankfort, Ky.-based AWP
Industries, bringing together
the largest manufacturers of
steel and wire decking for pallet rack and wire containers.
The deal, terms of which
were not disclosed, was finalized on Dec. 30, Nashville Wire
said in a statement announcing
the transaction.
Both companies will continue
to operate as separate entities
during the merger process,
which is now under way,
Nashville Wire said.
Founded in 1934, Nashville
Wire manufactures steel and
wire products for the material
handling, retail display, and
appliance industries. Steven
Rollins, Nashville Wire’s president and CEO, said the AWP
acquisition would strengthen
the company’s position in the
material handling category.
“The AWP acquisition presented us with a perfect
opportunity to grow the material handling segment of our
business by absorbing a capable and well-respected competitor,” said Rollins in the
statement.
Founded in 1990 as American
Wire Products, AWP changed
its name in 1995 to reflect its
expansion into areas beyond its
core business of wire deck fabrication. The company today is
a major producer of steel bulk
containers and custom parts
handling solutions. ;
